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Based in Dublin, Ohio, Cardinal Health, Inc. (CAH) operates as a healthcare services and products company that provides customized solutions for hospitals, pharmacies, ambulatory surgery centers, clinical laboratories, physician offices, and patients in the home. With a market cap of $27.3 billion, the company is expected to announce its fiscal Q1 earnings results before the market opens on Friday, Nov. 1.
Ahead of this event, analysts expect the drug distributor to report a profit of $1.64 per share, down 5.2% from $1.73 per share in the year-ago quarter. The company has consistently beaten Wall Street's earnings estimates in the last four quarters.
In Q4 2024, the company reported an EPS of $1.84, which outpaced the consensus estimates by nearly 7%. The bottom line improved 29% from the prior-year quarter, thanks to the company’s robust growth in the pharmaceutical segment and significant profit increase across all other segments.
For fiscal 2025, analysts expect CAH to report an EPS of $7.61, up 1.1% from $7.53 in fiscal 2024. Moreover, its EPS is expected to grow 10.5% year over year to $8.41 in fiscal 2026.
Shares of CAH have gained 11.7% on a YTD basis, lagging behind both the S&P 500 Index's ($SPX) 22.5% rise and the Health Care Select Sector SPDR Fund’s (XLV) 12.4% return over the same period.
CAH has underperformed due to various headwinds faced by the company in 2024, including the non-renewal of a contract with UnitedHealth Group’s subsidiary, OptumRX, which accounted for 16% of Cardinal Health's revenue in 2023.
Nonetheless, on Aug. 14, shares of CAH rose 3.7% after its strong Q4 and full-year 2024 earnings release. Along with its adjusted earnings, its revenue of $59.9 billion in Q4 surpassed Wall Street estimates of $58.72 billion and improved 12% from a year ago quarter. The company’s fiscal year 2024 operating cash flow of $3.8 billion and adjusted free cash flow of $3.9 billion reached its all-time highs.
On Oct. 7, T2 Biosystems, Inc. (TTOO), a leader in the rapid detection of sepsis-causing pathogens, announced an exclusive distribution agreement with Cardinal Health. This agreement grants CAH the exclusive rights to market and sell the company's FDA-cleared direct-from-blood diagnostics in the U.S.
Analysts' consensus view on Cardinal Health’s stock is moderately optimistic, with a "Moderate Buy" rating overall. Among 15 analysts covering the stock, five recommend a "Strong Buy," one suggests a "Moderate Buy," eight indicate a “Hold,” and one recommends a “Strong Sell.”
The average analyst price target for CAH is $118.73, indicating a 5.5% potential upside from the current levels.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
